Oil market not good for Europe's economy

Jan. 17, 2012 at 7:45 AM

VIENNA, Jan. 17 (UPI) -- OPEC predicted the European economy would falter in 2012, something an economist told an Iranian news service suggests an oil embargo is bad policy.

The Organization of Petroleum Exporting Countries, in a 69-page report Monday, said it saw momentum in the U.S. economy, where growth for 2012 was expected to top 2 percent. Europe, the OPEC said, seems to be on a downward spiral, however.

"Undoubtedly, the eurozone debt crisis constituted a key challenge for the global economy in recent months and is expected to continue to do so for at least some time in 2012," the OPEC report said.

Crude oil prices this week recovered from last week's lows after the European Union considered a possible six-month delay in an embargo on Iranian crude oil imports.

Marco Pietropoli, an economist at RM Wealth Management, told Iranian broadcaster Press TV that blocking Iranian crude from the market could spell trouble for a weak European economy.

"The last thing that many countries need is a further upswing in oil prices, which may damage the economic situation," he was quoted as saying.

Nevertheless, oil demand for countries in the Organization of Economic Cooperation and Development, which includes European countries and the United States, was expected to be less than in 2011, OPEC said.

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